PE Firm Cornell Sued Over $345 Million Instant Brands Dividend

Cornell Capital LLC, the former owner of Instant Brands, was accused of misleading lenders about the company’s performance in order to extract a $345 million dividend that helped drive the Instant Pot maker into bankruptcy.

A trustee filed suit Wednesday in bankruptcy court in Texas against the private equity firm, its founder Henry Cornell and former Instant Brands executives. The trustee, Alan Halperin, is seeking to recover at least $400 million for creditors of the company, which filed for Chapter 11 protection last year.

Cornell and his firm “plundered their portfolio company Instant Brands, leaving it insolvent and ...